The Verdict

Transamerica's expansion did continue; but so did the FRB suit against it. Stern old Amadeo P. Giannini denounced the whole thing as an Eccles plot. In any case, he had been reducing Transamerica's interest in the Bank of America. After old A.P.'s death, his son and successor, Lawrence Mario Giannini, kept on selling Transamerica's holdings in Bank of America, once 99%, until they were reduced to only 7.66%. Said Mario Giannini: "The Bank of America is not controlled by Transamerica in any manner."

Last week Rudolph M. Evans, the FRB governor who had presided over the hearings, disagreed with Giannini. Said Evans: Transamerica's 7% holdings are still enough to give it control of Bank of America. Transamerica's bank acquisitions, Evans charged, "have concentrated more economic power in one small group of men--perhaps only one man--than probably has ever happened before in the business life of our country .. . Not even the great railroad, steel, oil, tobacco or aluminum cases disclosed the existence of greater power in one organization directly to affect the economic life of so great a geographical area ... as does the record in this case." As evidence of that power, Evans cited figures: in the five-state area of California, Oregon, Nevada, Arizona and Washington, Transamerica controls 47 banks, with 667 banking offices which have about 41% of all banking space, 30% of all deposits, 50% of all bank loans. To break up this concentration, Evans recommended that FRB order Transamerica to sell all of its stock in the 47 banks, retaining only its interest in Bank of America.

Evans' decision is not binding, but the board is expected to back it with a formal order to Transamerica to dispose of the holdings. Transamerica will then be able to appeal the order to the court. There is little doubt that the U.S. Supreme Court will ultimately have to decide the case, in which Transamerica hopes to prove that FRB's action as prosecutor, jury and judge is illegal.

This file is automatically generated by a robot program, so reader's discretion is required.